Modbook is a company currently accepting reservations on the Crowdfunder platform.

They make the macOS tablet that Apple won’t — a full-featured, all-in-one pen tablet convertible for power and performance dependent Mac users. Led and advised by former Apple managers, Modbook has successfully established a strong brand with a proven record of manufacturing and shipping Mac-based solutions, and has built an active business platform powered by a reliable, flexible and scalable e-commerce system serving customers in 70 countries to date.

The Crowdfunder team sat down with Andreas Haas the CEO to discuss Modbook’s business strategy and growth.

Crowdfunder:

Steve Wozniak is a titan of personal computing and an impressive part of your diverse advisory team. How did you get him and the others to join your venture?

Andreas Haas:

I was fortunate enough to have the opportunity to meet and work with some of the most capable and talented people from all over the world during (and after) my tenure at Apple, and a lot of them are still part of the team supporting my vision to create macOS-based tablet computers.<

Steve, however, I met through the unlikeliest of friends, an accomplished Mixed Martial Artist who started talking to Steve about my project during a video shoot they were doing for a commercial. Steve was instantly intrigued. My friend put us in touch, and I got to work with one of my technology idols.

When I coach freshmen startup entrepreneurs, I always encourage them to leverage all their friends and family first. They will give you the most honest feedback on your ideas and if you are really onto something, they will be your greatest ambassadors.

Crowdfunder:

Your unconventional approach to reimagining Apple Macs impressed Steve Wozniak, a well-known technology enthusiast. Which aspects of the Modbook story compels investors to join and what are the top reasons for them to pass?

Andreas Haas:

The decision to either invest or pass really turns on two sides of the same coin – understanding our unique niche, where we are the only company on the planet that makes macOS-based pen tablet computers, and that it is safe from Apple.

The Mac segment of the growing pen hardware solutions market, primarily targeting the creative industries, exceeded $1.8bn in 2016 with about 1.5m users. They typically spend $4k or more to cobble together Apple high-end notebooks with other 3rd-party pen hardware like Wacom pen-enabled displays or windows tablets. However these workarounds are cumbersome, inefficient, and ultimately lacking when compared to the smooth and powerful all-in-one solutions we’re providing.

Apple’s current extremely successful business model is built on an effective and deeply ingrained platform strategy of distinctively splitting their mobile offerings into macOS-based notebooks vs. iOS-based iPhone/iPad tablets. It is this strategy that creates the need for our products in the first place.

Ultimately, our niche is safe because Apple would have to throw out their winning business strategy to address the needs of our $1.8bn revenue / 1.5m user market. Just in the last year, Apple generated an estimated $275bn in revenues from over 210m happy customers, whereas our niche barely represents ⅔ of 1% of their business.

As such, it is highly unlikely that Apple will pursue this, or as Apple CEO Tim Cook says: “Apple feels strongly that customers are not looking for a converged Mac and iPad”.

Crowdfunder:

There are myriads of PC vendors, but only two companies offering Macs, you and Apple. Given how fiercely protective Apple is of its intellectual property, how is this done?

Andreas Haas:

Like Shelby for Ford and AMG for Mercedes in the car industry, Modbook fills a high-end niche by transforming genuine Apple laptops into MacOS-based tablet computers. The MacBook Pro base systems come from Apple, we make the conversion kits and perform the transformations, and the customers receive their shrink wrapped Modbook tablet solutions, custom built to their individual specifications.

Due to this unique approach, when I launched the 1st. Generation Modbook back in 2008, Apple initially embraced us by signing us as an Apple Proprietary Solution Provider and later transitioned us into becoming an Apple Premier Developer. We are also proud to count Apple among our longest customers purchasing our Modbook solutions.

Being a respectful Mac citizen and keeping our solutions 100% Mac Developer guidelines compliant not only earned us our accepted place in the Apple ecosystem, it also ensures that our Modbook tablet computers support all macOS applications out of the box – if the app runs on the MacBook Pro it will run on the Modbook.

Crowdfunder:

Most hardware companies manufacture their products in Asia, but you are building your products right here in the US. How do you make that work?

Andreas Haas:

Actually, building in the US is a critical part of our business model and it took years to perfect our own special brand of Just-In-Time manufacturing.

It relies equally on the unique hardware abstraction layer design we developed for our Modbook product line, as well as on our location in Southern California where we are able to tap into the same wealth of advanced aerospace engineering and production capabilities that other inspiring ventures like SpaceX are building their successes on. Here we have created a networked supply chain that is both highly capable, scalable, and most importantly quickly adjustable.

The combination of advanced design, plugged into local US-based production, allows us to efficiently and expediently include new features and updates Apple regularly phases into its MacBook products. This enables us to take full advantage of the technology lead Apple is bringing to our products like the revolutionary Touch Bar we’ll be incorporating into the upcoming Modbook Pro X.

Turning potential obstacles into advantages not only improves your chances for success, but it also creates barriers for potential competitors.

Crowdfunder:

You still consider yourself a startup company with its major breakout product launch, the Modbook Pro X, coming up this year. However, at the end of 2012 you launched the Modbook Pro which is still available from your website. Can you tell us that story?

Andreas Haas:

Building a successful hardware business requires a lot more than completing the product development.

Many startups struggle to get their ideas manifested in the first production batch, only to then fail at one of the challenges arising from building a solid infrastructure to run the actual business around their product.

We used the Modbook Pro, put together from development milestones of the Pro X project, to build, thoroughly test and optimize as many of the business processes we expect to need.

For example, we created our own online store capable of advanced custom product configuration, rolled it out to multiple countries, and ran it with country-specific pricing and currencies, and honed our ability to sell, ship, deliver and service products to customers in 70 countries.

Furthermore, producing prototypes or pre-production units will not show how the planned manufacturing technologies and processes will actually perform during live production.

For example, we initially adopted a sheet metal forming process with secondary machining for parts to achieve certain cost reductions. This process worked great for the prototypes and pre-production, but when we ramped up to production numbers the yield dropped so dramatically that we abandoned the process for the Pro X entirely.

Only real life transactions and product movements across the globe will allow you to work out the kinks in your business infrastructure, and we used the Modbook Pro to do that on a better controllable scale.

Crowdfunder:

There are many computer & tablet vendors and even more peripheral makers, vying for customer attention and combined spending billions of dollars in marketing. How can you as a startup company with limited resources rise above that fray and reach your target audience?

Andreas Haas:

In my experience, for a hardware business, the most effective strategy per marketing dollar spent is to establish a solid initial market footprint with a properly conducted product launch.

The key to the success here is the amount of media coverage you can generate. A launch presents a golden opportunity for your story to get picked up by the news media and rise above the fray at a fraction of the marketing budget needed otherwise.

In addition to having all your marketing material prepared on the front-end and your sales team ready to follow through on any leads on the back-end, you need to have created as many press evaluation units of your product as you can afford, pre-pitched and pre-matched to news outlets your target audience is likely to pay attention.

The story about your product being new, constitutes a perishable asset with a hard expiration date. Once the first news reports have been published, it will require increasingly more effort to get coverage. In fact, an underwhelming product launch is a lost opportunity nearly impossible to make up for afterwards.

Crowdfunder:

There are many computer & tablet vendors and even more peripheral makers, vying for customer attention and combined spending billions of dollars in marketing. How can you as a startup company with limited resources rise above that fray and reach your target audience?

Andreas Haas:

This latest fundraiser was to be our first conducted under Rule 506(c) of Regulation D, allowing us to broadly solicit and generally advertise our private offering to accredited investors.

The main reason for switching to general solicitation, namely its ability to reach a (much) larger number of potential investors, is also the key to our decision to host our campaign with Crowdfunder.com. Compared to all other platforms we researched, Crowdfunder.com offered the best means to overcome the challenges posed by widening the audience of our fundraising efforts.

In Crowdfunder.com we found a platform that (in no particular order):

• … has one of, if not the largest, built-in community of accredited investors while providing the tools and mechanisms to actively reach out to them.

Our Crowdfunder.com marketing package presented our venture in short order to a huge number of potential investors through newsletters and social media posts, and provided us with tools to actively identify and reach out to individual investors.

• … offers tools to measure and track the results of your fundraising efforts. Those backend tools allow you to focus your efforts on the initiatives showing the highest results.

Not only can this help improve your conversion rate, but it also helps you make better use of your most precious commodity – time.

• … provides one of, if not the most, advanced environment to both prepare and present the campaign to interested investors.

The platform’s powerful backend tools make it easy to compose a great campaign page, guiding you through the process step-by-step and making sure that all important aspects about your venture are covered. Once your campaign is live, your venture is presented to visiting prospects in a well laid out and clearly structured way, designed to quickly capture a potential investor’s interest and then provide in-depth information at his fingertips.

• … contains a well developed set of tools and mechanism to collect and follow through on all generated leads.

If your marketing is doing well, you will see a lot of contacts registering their interest with you to learn more. The built-in mechanisms and tools help move those contacts further down the sales funnel while gauging their individual interest levels. This allows you to identify and focus your efforts on those closest to a decision to invest

One of the key challenges we experienced in dealing with leads generated through this latest campaign compared to the investor contacts we developed in the past, is to keep our response times for follow through on inquiries down – there are (happily) just so many more inquiries to deal with. The last thing you want to happen is to let a potential investor lose interest, because it took too much time to get back to him with that document.

Crowdfunder.com’s tools can only get you started down the road to closing investors. Therefore, before you launch your campaign, you really should have:

• mapped out exactly how you intend to guide a potential investor to closing,

• figured out how you are going to track the progress for each individual lead,

• identified who is going to help you on your team and how exactly you are going to collaborate,

• determined what information and/or documents you intend to or are willing to share

• everything actually prepared, in place, tested and ready to go.

Once your campaign starts, time you have to spend on any of the above, will be time lost following through on potential leads, which could cause you to lose out on potential investments and likely curtailing the success of your campaign.

The views expressed herein are those of the individual and do not necessarily reflect the views of the company. This post may not be reprinted or disseminated without our written permission.